Tax on non-productive assets of legal entities
The Generalitat has just approved, by Decree-Law 8/2019 of 14 May, several amendments to Law 6/2017 of 9 May on the Tax on Non-Productive Assets of Legal Entities (commented on in our AddNEWS of May 2017). This regulation has been approved after the Constitutional Court’s ruling of 28/2019 validated the constitutionality of the autonomous tax created for Catalonia.
The Decree-Law regulates the deadlines for the presentation of this declaration, which will be annual from 1 June to 30 June. However, since the application of this was suspended as a result of the initiation of legal proceedings regarding its normative validity, once its constitutionality had been ratified, and given that the tax was already in force, a specific period of time is stipulated for the presentation of the declaration for the years 2017, 2018 and 2019, which will be from 1 October to 30 November 2019.
In addition, it also takes advantage of the situation and clarifies how to quantify undistributed profits in order to consider those assets which, because they are the object of reinvestment of an affected asset, are not counted as non-productive assets and, therefore, excluded from taxation.
The presentation should be made telematically through the electronic headquarters of the Catalan Tax Agency.
It should be remembered that this tax is a pioneer in Spain and focuses on recording those non-productive assets located in Catalonia (not associated with economic activity) and rights that fall on these assets that are owned by companies but that are actually used by individual partners, participants or family members. By way of example, it should be noted that the focus is on real estate used as a primary residence, second homes, vehicles with more than 200 horsepower, boats, private planes or helicopters, art objects, antiques and jewellery, mainly.
It should be noted that, on the contrary, property belonging to foundations, non-governmental organizations and, in general, non-profit organizations is excluded from taxation, provided that it is used exclusively for their own non-profit purposes.
Consequently, it should be noted that the purpose of this tax is to adapt the taxation of non-productive assets to the actual ownership, thus paying tax and avoiding possible tax fraud, and with the aim of seeking to redistribute income.
Due to the need to clearly determine the assets that may or may not be recordable, it is advisable to review the composition of the asset in the years 2017, 2018 and 2019 as well as the possible exceptions that may apply in terms of taxation.
